GameStop share sale raises close to $1bn of new funds

GameStop Corp sold close to $1 billion in new stock this past week, tapping into the fresh demand stirred up amid this month’s ‘memestock frenzy’.

Having more than doubled in value, and then pulled back more recently, since a series of social media posts by ‘Roaring Kitty’ – aka Keith Gill – sparked a fresh round of retail investor share buying, the likes of which was last seen in the 2021 ‘memestock’ phenomena.

GameStop’s bankers were then sent to market to sell new shares to help the games retailer raise funds to pay down debt and boost its financial position.

It has now been announced that some $933.4 million worth of new shares have been sold, that’s 45 million new shares priced “at-the-market”.

This was the maximum number of shares that could be sold.

Some of the proceeds could also be used for potential acquisitions and investments, according to a GameStop statement.

In New York, news that the share sale (which had been scooping up excess demand for existing shares in the market) had now completed helped GameStop to rally.

GameStop stock reacts positively

In regular trading, it was up 3.7% to $19.00 before stepping up significantly in ‘afterhours’ dealing where it gained a further 12.9% to finish at $21.45 per share.

Earlier this week, Wedbush Securities analyst Michael Pachter described the company’s plan to sell 45 million new shares “at market” prices as prudent, as he said it will boost cash reserves whilst GameStop is struggling to re-focus its business and reverse its operating losses.

Previously, GameStop told investors it expects its first-quarter net sales to range between $872 million and $892 million, down from $1.24 billion in the same period last year.

The company, which largely relies on brick-and-mortar stores, has been grappling with the shift of customers towards e-commerce platforms for purchasing video games and collectibles.